Beauty Insurance: One Step Ahead of an Ugly Lawsuit

TLTR: This article examines Beauty Insurance in depth to help you determine if it is a good fit for your needs. By the end of this review, you should have a good idea whether Beauty Insurance is the right option for you!

As a beauty professional, you offer your customers more than just a beauty regime or a haircut. Your beauty salon is a one-stop shop for your client’s beauty needs. But no matter how professional your salon is, things can still go wrong. Thus, beauty salons require beauty insurance to provide protection for unhappy clients and unexpected losses.

What is Beauty Insurance?

Beauty insurance ensures protection for your business and the employees involved in the services provided. This policy consists of aspects of liability insurance that are related to treatments provided at the salon. It also covers other equipment required to deliver these services like UV lamps, dryers, and oils in case they get damaged.

How is Beauty Insurance A Necessity?

According to Statista, today the global beauty industry is valued at around $511 billion, and the U.S. is the world’s largest beauty market. Beauty insurance can protect your business from unpredictable and unavoidable accidents. Suppose your beauty salon got sued for a third-degree burn while bleaching your client’s hair. The client had spent hundreds of dollars on her treatment and then sued your salon for the negligence and suffering caused. Here, if your salon’s hairdresser insurance had liability insurance, the cost would be covered. But if they don’t, the employee would have to pay from their pockets.

Who Needs Beauty Insurance?

Hairstylists

Many things can go wrong in a hair salon. But when you know that your insurance can pay for any potential mishaps, hairstylist insurance can buy you peace of mind.

Esthetician

An esthetician faces various risks such as allergic reactions or damage to property. So, esthetician insurance is a great option for those looking to cover these risks.

Masseuse

A masseuse can insure their business with massage insurance. Massage therapists are prone to risks such as injured employees or property damage.

Nail Tech

Nail salons are exposed to higher risks as nail technicians work with chemicals and UV lamps. Thus, it’s always wise to purchase nail salon insurance to avoid any financial burdens. Hence, having beauty insurance can help them financially protect themselves.

Barber

As a barber, you work closely with scissors, chemical treatments, and hot wax. Thus, all of these tools have the potential to injure a client. Barber insurance can help you pay claim-related costs if any accidents occur.

What Policies Are Included?

Professional Liability Insurance

Also known as errors and omissions insurance, professional liability insurance protects businesses that provide services to clients. It covers your business when a service you provided causes financial harm to a client. Professional Liability Insurance protects against:

• Work Mistakes: Sometimes, a simple mistake can cause your clients to lose money.
• Undelivered Services: Failing to deliver any service to a client by the deadline can impact the client financially. For instance, if your client has paid in advance for the service and suffers a loss due to your delay, the client can file a lawsuit.
• Accusations of Negligence: Your business can face a professional liability lawsuit if a client accuses you of negligence.

For example, a client visits your hair salon to get her hair done for an upcoming modeling shoot. She trusts you to make her look presentable for the event. However, you accidentally damage her hair and her modeling agency decides to use another model in her place. So, she blames your salon and decides to sue you for the lost income and damage to her hair.

Thankfully, if your hair salon insurance has professional liability insurance under beauty insurance, it can cover the litigation expenses.

Product Liability Insurance

Product liability insurance covers your business from financial and legal risks when the quality of the goods and services they use is faulty. These claims can arise due to:

• Faulty production of a product
• Defective product design
• Defective instructions, warnings of the product

The beauty industry uses a range of products such as facial creams, masks, hair products, etc. So, if your salon liability insurance includes product liability, it will protect you if a client suffers an allergic reaction from your product. So, it’s a good idea to have product liability insurance in your existing insurance plans.

Inland Marine Insurance

Inland marine insurance provides coverage for the loss of any property damaged or stolen while being transported. There are different types of inland marine insurance:

• Bailee’s Customer Coverage: This covers any damage to customer property while it is in your salon’s possession or in transit to and from your salon. In the case of hairstylist insurance, wigs and other hairpieces might use Bailee’s coverage.
• Goods Off-Premises: When an employee travels to a client’s house to perform any services.

Workers Compensation Insurance

Workers compensation insurance offers coverage for any lost wages or medical expenses employees incur when they become sick or injured on the job. Most states mandate businesses with two or more employees to purchase workers’ compensation insurance. Legally, when employers provide workers compensation insurance for their employees, the employees no longer have the ability to sue their employer for any injury they sustain on the job.

Beauty industry employees are exposed to many hazards like:

• Chemical burns
• Scratches
• Legs and back injuries due to long working hours
• Puncture wounds, and many more

So, make sure your certificate of insurance includes workers compensation.

Business Owners Policy (BOP)

A Business Owners Policy is a bundle of comprehensive and affordable policies to protect your beauty business. It combines commercial property, general liability, and business interruption insurance into one package. With it, you cover your businesses from the following claims:

• Fire, theft, or other covered disasters
• Bodily injury
• Property damage

Commercial Property Insurance

Commercial property insurance protects your business’s property and location against unpredictable circumstances like:

• Natural disasters
• Fire
• Accidents
• Theft

Moreover, it provides payment to repair and replace any tangible assets that were damaged. For example, many products in a tanning salon, such as products containing alcohol or certain chemicals, are highly flammable. Poor cleaning procedures might cause a severe fire hazard. Thus, it is wise to include commercial property insurance in your beauty insurance to cover any property-related loss.

Commercial General Liability (CGL)

If your products or services accidentally cause injury to one of your customers, general liability insurance is here to help you out. It covers claims related to:

• Personal injury: CGL will protect you against third-party claims of slander or libel.
• Bodily injury: Any medical costs that your company has to bear due to an injury caused by your business. CGL covers such medical expenses.
• Property damage: If an employee damages the client’s property CGL will cover a subsequent claim.

Exclusions in Beauty Insurance

Although beauty insurance provides a lot of coverage, it still has some notable exclusions. These include:

Aqua Therapy

It is a set of activities performed underwater. to provide relief to patients with neurologic and musculoskeletal conditions. Although this method of pain management has been used in the industry since ancient times, beauty insurance does not cover it.

Cryotherapy

Cryotherapy has become one of the most sought-after services in the spa industry. It is a pain management method in which freezing temperatures deaden the irritated nerve. Dermatologists use this to treat abnormal skin cells. Nonetheless, spa insurance does not cover cryotherapy.

Microblading

Microblading is the latest trend in the beauty industry, that uses tiny needles to draw an ink-based eyebrow. Most barbershops provide this service. However, barbershop insurance does not cover microblading.

Two Types of Policies: Occurrence vs. Claims-Made

The main difference between the two is that an occurrence policy has lifetime coverage for any incidents that occurred during the policy period, and claims-made only covers events that occurred and were reported during the policy period. Under an occurrence policy, if a client files a claim in 2020 for damage done in 2018 and you had the policy from 2018 – 2019, the claim is covered. However, if you had a claims-made policy, since the client filed the claim after the policy period, the claim would not be covered. Occurrence policies tend to provide larger coverage and thus typically have more expensive premiums.

Cost of Beauty Insurance

Beauty insurance is not a one-size-fits-all policy. The cost of beauty insurance is dependent on several factors:

• Number of employees
• Size of business
• Types of services offered
• Location
• Estimated revenue for the year

Has this article been helpful to you? Check out our insurance blogs to understand more on which coverage is good for you. Leave a comment below and share your thoughts with us.